Judge reserves Dotcom bail decision

Piracy-accused Kim Dotcom in court while his bail application is heard.

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Piracy-accused Kim Dotcom has been further remanded in custody until at least tomorrow after the judge reserved his decision on bail.

North Shore District Court judge David McNoughton said he would make a written decision hopefully tomorrow. Dotcom would remain in jail until then.

Bail arguments had progressed throughout the afternoon.

Much of the argument had centred around whether Dotcom's multiple aliases contribute to his being a flight risk.

The prosecution argued Dotcom's multiple passports - under three different names - Schmitz, Vestor and Dotcom were a risk.

However, the defence said the passports in the names of Schmitz and Vestor had not been used since the Dotcom one was issued in 2010.

Defence lawyer Paul Davison said the passports were found in a bed "used as a work location" and were of no consequence.

Crown lawyer Anne Toohey also said Dotcom had multiple credit cards, all discovered in the raid.

There were six in one wallet, 19 in another and ten in another. These were all in a variety of names.

Davison said Dotcom "collected" the credit cards.

Also deemed important was Dotcom's previous altercation with the German and Thai authorities during 2002.

The Crown argued Dotcom had been arrested and deported from Thailand, while the defence said he willingly went back to Germany with police.

Another New Zealand resident, Bram van der Kolk, and Mathias Ortmann and Finn Batato, both of Germany, who were arrested alongside Dotcom on Friday, have also been remanded in custody, and will reappear on Wednesday.

THE GUN QUESTION

Earlier, prosecutors said a gun found when police raided Dotcom's mansion had live rounds as well as a rubber bullet.

Dotcom, 37, was arrested by armed police alongside Batato, van der Kolk and Ortmann, as part of the "Mega Conspiracy" case, an FBI-led operation into copyright conspiracy.

US authorities claim that Megaupload - a repository for films, TV shows and books, where users could watch content without charge - and its sister sites made more than US$175m in criminal proceeds and cost copyright owners more than US$500m.

Dotcom today vigorously denied all charges levelled against him as lawyers argued their way through his bail hearing.

The gun in question, discovered in a safe just metres from where police arrested the German internet lord at his Auckland mansion, was a type never seen before by arms experts in New Zealand.

During arguments in Dotcom's bail hearing at the North Shore District Court today, defence lawyers said the gun was loaded with a rubber bullet.

Crown lawyer Anne Toohey rebutted that this afternoon, saying the shotgun was also loaded with buckshot.

She said a police arms officer said the weapon must have been modified.

"It couldn't be cut off any further back because of the position of the magazine," she said.

To get a license for that type of gun in New Zealand it would have had to be granted a permit. The arms officer didn't believe that would happen.

She read a summary of the police visit which said Dotcom, when approached by police and ask to show his hands, had refused. He'd hidden behind a pillar about four metres from the gun safe, she said.

Toohey said Dotcom did not have licence for the gun, and neither did his bodyguard.

She listed numerous reasons why Dotcom should not be allowed free, including his wealth of resources. Despite a freeze of his assets, they believed he still had more bank accounts, she said.

Toohey also detailed a flight from Germany, when Dotcom was wanted on charges there in 2001 and 2002. He allegedly fled to Thailand, where authorities later caught up with him.

He also had multiple IDs and passports in three different names, including two Finnish passports and dual residency in Germany and Finland.

Also adding to his risk of flight were the private jets he often hired, and the helicopter at his home, she said.

The Crown also opposed electronic bail, given it would likely mean access to phones and the internet.

It would also likely mean the co-conspirators living together, which Toohey said could result in the mega sites being re-activated.

Davison argued against all those points, saying Dotcom wanted to stay in New Zealand with his family and wouldn't jeopardise his residency by fleeing.

There was no financial incentive to re-start the business if Dotcom was granted bail, Davision said, as the servers had been shut down.

"All users and contacts have been shut down.There is no way to start this business up by the use of a computer anywhere."

As for resisting arrest, Davison said Dotcom believed he had complied fully. He was also providing details of a bank account not covered in the seize of assets to show cooperation.

EXTRADITION PROCESS

Megaupload and another company, Vestor, were indicted by a grand jury in Virginia and charged with racketeering conspiracy, various copyright infringement counts and conspiring to commit money laundering.

Although the accused do not face charges in New Zealand, the country is helping the FBI and the United States Government with the arrests and extradition.

Following the bail hearing, the US authorities have 45 days to file extradition documents.

There will then be an extradition hearing to decide the matter. This was expected to take up to a day in court.

Others charged outside of New Zealand were Julius Bencko, 35, of Slovakia; Sven Echternach, 39, of Germany; Andrus Nomm, 32, of Estonia. They remained at large.

Toohey updated the court to the status of two of Dotcom's co-accused.

She said Sven Echternach had travelled from the Philippines to Germany, from where he could not be extradited to the USA. There was no agreement between the two countries, she said.

A second man, Andrus Nomm, had been arrested in the Netherlands.

CALL FOR INQUIRY

The men's hearing comes as Opposition politicians call for accountability into Dotcom's status as a resident.

Although the overweight, flamboyant former hacker – who legally changed his name to Dotcom from Shmitz – had convictions from his native Germany, he was able to settle in Auckland after investing $10 million in New Zealand government bonds in 2010.

Those bonds are now part of the assets frozen by authorities investigating the charges against Megaupload – which include racketeering, money laundering and copyright infringements.

NZ First leader Winston Peters called for the prime minister to set up an immediate inquiry into how Dotcom was allowed to stay permanently in Auckland, where he lived in a $30 million mansion belonging to the Chrisco enterprise founders.

"It has been reported that Dotcom is known in Germany as a notorious computer hacker and has been convicted of insider trading, yet immigration authorities let him settle here under the so-called investor-plus category. The prime minister should order an immediate inquiry ... to see who was involved in this immigration scandal and ensure that it doesn't happen again."

Labour immigration spokeswoman Darien Fenton said that before there was an inquiry, it should be asked whose responsibility it was to allow the discretion to overlook his convictions.

The "investor-plus" category Dotcom's residency fell into needed to be looked at to ensure others of "dubious" character were not also able to bypass the good character test, she said.

In a statement, the Immigration Service said that "Mr Dotcom made full disclosure of his previous convictions and they were taken into account in the granting of his residence. The Immigration Act allows for discretion to be exercised in certain cases. In this particular case, Immigration NZ weighed the character issue and any associated risk to New Zealand against potential benefits to New Zealand".

* An earlier report incorrectly said a security guard wore the hidden camera.